Guys, something terrible has happened!!!
Recently, a series of actions by the US government in the field of cryptocurrency have attracted widespread attention. According to Protos, the US Supreme Court has refused to hear the appeal of Battle Born Investments and others for 69,370 bitcoins (worth about $4.4 billion) related to the Silk Road. This ruling means that these bitcoins may soon be auctioned by the government, and the market may usher in a new round of shocks!
Government seizes $12 billion worth of Bitcoin
According to reliable data, the US government currently holds more than 200,000 bitcoins with a market value of approximately $12 billion. This makes the United States one of the world's largest bitcoin holders. These bitcoins are mainly stored in encrypted cold wallets controlled by the US Department of Justice, the Internal Revenue Service and other relevant agencies, with high security and privacy protection.
The sources of Bitcoin are diverse and the amount involved is huge:
- In November 2020, the US government confiscated 69,369 bitcoins from Silk Road, the largest black market on the dark web.
- In January 2022, the government seized another 94,643 bitcoins in the Bitfinex hack.
- In March 2022, the government seized 51,326 bitcoins in an operation against Silk Road hacker James Zhong, and currently holds 41,500 of them.
In addition to Bitcoin, the U.S. government also holds 50,200 Ethereum (ETH, about US$130 million), 750.7 WBTC (about US$44.41 million) and some other small tokens, with a total asset value of about US$12.4 billion.
Government selling may trigger sharp market fluctuations
"Government selling" has become an important indicator of Bitcoin prices. For example, in June this year, the German government sold more than 50,000 Bitcoins and made a profit of $2.8 billion. This behavior caused the price of Bitcoin to fall by 9.8% that month, from about $67,000 on June 1 to about $60,000 on June 30.
Possible future market impact:
1. Increased price volatility: If the U.S. government starts selling Bitcoin on a large scale, the market supply and demand relationship will be broken and prices may fall rapidly.
2. Shaken market confidence: Selling by large institutions is often seen as a negative signal and may trigger panic selling by more investors.
3. Increased regulatory expectations: Regulatory policies on cryptocurrencies continue to evolve around the world, and major government actions may increase market concerns about uncertainty about future regulation.
Bitcoin miners cleared their positions, and the market selling pressure increased again
Not only the government, but also early Bitcoin miners have begun to take action. Recently, the "Satoshi Nakamoto fellow miners" who had been dormant for 14 years liquidated and cashed out, making a profit of more than 1 million times. This move means that the Bitcoins held by some early miners for a long time are gradually flowing into the market, further exacerbating the selling pressure in the market.
Market expert analysis:
Despite this, some analysts believe that the early liquidation of miners may not trigger a sharp drop in prices, as most miners may choose to hold for a long time rather than sell in large quantities. However, if more such liquidations occur in the future, the downward pressure on the market will increase further.
Latest developments: The US Supreme Court refuses to hear the case, and the pace of disposal of crypto assets is accelerating
On October 8, 2024, the U.S. Supreme Court refused to hear a case involving 69,370 bitcoins related to the Silk Road. This move cleared the legal obstacles for the U.S. government to dispose of these crypto assets, which means that these bitcoins may soon be auctioned or sold in other ways.
In addition, in August this year, the US government transferred about 10,000 bitcoins to a wallet address of Coinbase, which was also related to the Silk Road case and was worth about $593.91 million. This transfer triggered market concerns that the government might sell bitcoins, causing the price of bitcoin to fall on the same day.
Historical precedents for government actions against Bitcoin
It is worth noting that when the U.S. government deals with confiscated Bitcoin assets, it usually disposes of them through auctions or other legal means. For example, in 2014 and 2015, the government auctioned Bitcoin seized from the Silk Road several times. This shows that the current action may be a normal step for the government to dispose of assets in accordance with established procedures.
